Analysts from well-known financial institutions and Bloomberg believe that the probability of success of the Winklevoss Bitcoin ETF COIN is now relatively high. The reason lies in the unpredictability of the US Securities and Exchange Commission (SEC).
There are many more parts of the Bitcoin loophole that are under development
Some of these parts could have a major impact on the Bitcoin loophole welcoming the world’s first Bitcoin loophole. Other parts, on the other hand, could completely eliminate the likelihood of getting through.
Based on the SEC’s previous decisions regarding innovative ETFs, it is difficult to say to what extent confirmation of the Winklevoss ETF can be achieved. But the involvement of a respected 30 billion US dollar financial institution, the participation of independent analysts, and Quant Trader from KCG and Susquehanna give hope.
In recent years, Bitcoin has made a name for itself as digital gold. However, it is still in the process of fulfilling its technical potential to become an efficient and affordable processing network. For this reason, the majority of Bitcoin users use the current Bitcoin network as a means of protecting their wealth or carrying out large transactions that would not have been possible without a middleman.
Why analysts believe in the Bitcoin ETF
As Bloomberg Intelligence senior ETF analyst Eric Balchunas said, the SEC has already introduced ETFs in the past that have not yet opened a new market and at the time did not arouse any interest in the industry. One example is the ETF ASHR, which was approved by the SEC authority before US companies got into action.
„The probabilities are so high. You get possible regulatory, financial and security problems, but ETFs have a long history of opening up new markets because of that. A great example of an ETF approved by the SEC is ASHR. It was approved before the US companies really knew about it.“
As Spencer Bogart, Vice President of Equity Research at Needham & Co, already mentioned, the opportunities for the Bitcoin ETF are almost equal. This can be deduced precisely from the fact that the officials at the SEC would not receive any advantage/disadvantage from the ETF. Should the ETF fail and destabilize the market, however, the officials will be called to account.
Until the deadline Bachunas sees the chance for the Bitcoin ETF at about 50 percent. The Bitcoin industry and community are quite optimistic about the Bitcoin ETF. This is mainly due to the work the Winklevoss twins are putting into it, as they have now even commissioned a reputable financial institution on State Street to maintain and audit the ETF.
One advantage Balchunas sees in the ETF is the lower premium you pay over other public Bitcoin instruments. As you can see on the Bitcoin over-the-counter (OTC) market, instruments like the Bitcoin Investment Trust (GBTC) are traded at high premiums on the large regulated markets.
GBTC is currently traded at USD 129 per share, which corresponds to a price of USD 1,290 per Bitcoin. At editorial time, a Bitcoin is traded at 1,250 US dollars.
„If it’s a bit like high-yield bonds, you would have to trade Bitcoin ETFs at a premium of 1 to 2 percent, which would still be better than the OTC market,“ Balchunas finally added.